Nissan to kick-start SKD builds in Ghana

Nissan will start assembling semi-knocked down kits of the new Navara in Ghana next year, but Nigeria is on hold due to a delays in implementing its auto policy. The CKD kits come from Rosslyn.ry.

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Mike Whitfield, MD of the Nissan Africa’s regional business unit and a director of sub-Saharan Africa, confirmed this recently during a business update following the commencement of production of the new Navara at the Rosslyn plant in August this year.

Whitfield says Nissan was an early mover into the Nigerian market when, in 2014, it became the first overseas vehicle manufacturer to begin local assembly in Nigeria.

He says Nigeria at that time had a new-vehicle market of about 50 000 units a year, but vehicle manufacturing has “virtually stopped” in the county after the government failed to implement its automotive policy.

Whitfield says Nissan still assembles between 100 to 150 vehicles a month in Nigeria from kits exported from the Rosslyn plant and is renewing discussions with the Nigerian government following the progress made in Ghana, particularly as Nigeria is a central part of the automotive ecosystem in Africa.

He says the Nigerian government failed to fully implement its automotive policy, including duties on used vehicles, which made the business case for assembly operations very difficult.

Whitfield says Nigeria currently has a market of only 10 000 new vehicles a year for a population of more than 200 million. The assembly of the new Navara in Ghana follows Nissan's appointment of Japan Motors Trading Co. to develop its new vehicle assembly facility in Accra in Ghana.

Prior to this, Nissan signed a memorandum of understanding with the government of Ghana in 2018 during the initial stages of working towards the Ghana Automotive Development policy.

Nissan Motor Company’s strategy is to make its Rosslyn plant the light commercial vehicle (LCV) hub for its Africa operations.

Whitfield says fully built up new Navara units will also be exported from South Africa to most of the markets in Africa following an investment of R3 billion in the Rosslyn plant. Nissan also owns a plant in Egypt.

But Whitfield says Nissan needs to also look at establishing assembly operations in one of the East African markets, such as Kenya, Tanzania or Ethiopia. He says the potential of Africa is what is driving Nissan’s strategy on the continent.

He says Africa has a population of 1.3 billion and an average GDP of 1.7% but a total new-vehicle market of only 1.3 million.

India has the same population, a slightly higher GDP at 2% and new-vehicle sales of 4.4 million units.

“There are fewer vehicles owned in Africa than anywhere else in the world. Africa accounts for 1.3% of the world’s vehicles but has 17% of the world’s population.

“Africa has a motorisation rate of 42 per 1 000 versus the global average 182 per 1 000,” he says.

Whitfield also reckons that disassembled knocked down (DKD) new-vehicle assembly is only the start of the vehicle production journey in a country, which has to transition thereafter to completely knocked down (CKD) production and the localisation of components.

He says Nissan’s objective is to be the No 1 motoring brand in Africa and believes the African Continental Free Trade Area (ACFTA) agreement signed earlier this year will make Africa a formidable force in the world because of Africa’s combined GDP.

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